SkinBioTherapeutics PLC (AIM:SBTX, FRA:5KW) shares fell 39% on Monday and are down 62.5% over the past week after the company said it expected to seek the reversal of all accrued royalty income from its audited revenues for the year ended 30 June 2025.
The AIM-listed life science business focused on skin health said it received information late on Friday 13 February, that has informed its ongoing investigation into the conduct of its former chief executive.
Board concerns about the former chief executive’s conduct led to him being suspended and then resigning, and the company said the investigation was continuing.
SkinBioTherapeutics said it now had “reason to believe that the former CEO has misrepresented material information to the Board and senior management, the Company’s auditors and advisors”.
The company said the former chief executive was informed of these allegations on Sunday 15 February, and it has reported the board’s findings so far to its auditors.
SkinBioTherapeutics said the information received on 13 February had cast “significant doubt on the validity of the accrued royalty income recorded in the audited accounts” for the year ended 30 June 2025.
The board said it currently expects the FY25 accrued royalty income, which amounted to £770,000, will be removed from the FY25 accounts, subject to confirmation by the company’s auditors.
The company said it believed this was an isolated incident but has begun a broader investigation to review all of the group’s businesses with respect to financial reporting and operations.
SkinBioTherapeutics said contracts held with key partners and customers “remain sound”, and it reiterated what it called the “strong future potential” of its SkinBiotix technology and strategy in skin care and skin health.
The company said Dermatonics and Bio-Tech Solutions are operating as reported at FY25, with audited revenues of £2.20 million and £1.38 million respectively, and that both are trading at cash breakeven.
It said direct product sales of AxisBiotix were reported correctly in FY25 and that its partnership with Superdrug Stores is “still at a very early stage”.
The board said that, if the reversal is confirmed, FY25 revenue would become £3.87 million from the reported £4.64 million and adjusted EBITDA would be restated to a loss of £1.17 million from the reported loss of £0.41 million, with an operating loss of £1.47 million.
SkinBioTherapeutics said it had a “robust cash position” of £2.92 million as at 13 February, compared with £4.78 million as at 30 June 2025.
As a result of the investigation and the expected removal of the FY25 accrued royalty income, the board said it now anticipates that results for the year ended 30 June 2026 will be “significantly below current market expectations”, which it cited as revenue of £6.2 million and adjusted EBITDA of £0.7 million.
Martin Hunt, the non-executive chairman, has assumed the role and responsibilities of executive chairman temporarily, and the company said a process is underway to appoint an interim chief executive in the near term and thereafter a permanent chief executive.